Lvnv Funding Llc v. Trice

• Decision Date: 30 June 2011
• Docket Number: No. 1–09–2773.,1–09–2773.
• Citation: 352 Ill.Dec. 6,2011 IL App (1st) 092773,952 N.E.2d 1232
• Parties: LVNV FUNDING, LLC, Plaintiff–Appellee,v.Matthew TRICE, Defendant–Appellant.
• Court: United States Appellate Court of Illinois

2011 IL App (1st) 092,773
952 N.E.2d 1232
352 Ill.Dec. 6

LVNV FUNDING, LLC, Plaintiff–Appellee,
v.
Matthew TRICE, Defendant–Appellant.

No. 1–09–2773.

Appellate Court of Illinois, First District, Third Division.

June 30, 2011.

[952 N.E.2d 1233]

Woerthwein & Miller, Chicago (Theodore A. Woerthwein, John Miller, of counsel); Krislov and Associates, Chicago (Clinton A. Krislov, Mike R. Karnuth, Eve–Lynn J. Rapp, of counsel), for appellant.Barhorst & Associates, P.C., Chicago (Stacie E. Barhorst, of counsel); Hinshaw & Culbertson, L.L.P., Chicago (Stephen R. Swofford, David M. Schultz, of counsel), for appellee.[352 Ill.Dec. 7] OPINION Justice NEVILLE delivered the opinion of the court, with judgment.

¶ 1 When an unregistered collection agency obtains a judgment against a debtor, does the lack of a license make the judgment void, or merely voidable? The trial court here said it made the judgment [352 Ill.Dec. 8]

[952 N.E.2d 1234]

merely voidable, so that the debtor's failure to raise the issue before entry of the final judgment left him with no recourse. We disagree. We find that our legislature's criminalization of an unregistered collection agency's collection of a debt establishes an intent to void any judgment entered in favor of an unregistered collection agency. Accordingly, we reverse and remand.¶ 2 BACKGROUND

¶ 3 Matthew Trice used his Citibank credit card to pay for some plumbing. He did not pay Citibank the full amount the plumber charged. Citibank sold its interest in the credit card account to a collection agency named LVNV Funding LLC. In January 2008, LVNV sued Trice to recover the balance due on the account. On January 15, 2009, after a trial at which Trice represented himself, the trial court entered a judgment in favor of LVNV for $3,303.90.

¶ 4 Trice hired counsel and, on March 3, 2009, Trice's counsel filed a motion to vacate the judgment pursuant to section 2–1401 of the Code of Civil Procedure. 735 ILCS 5/2–1401 (West 2008). In the motion, Trice alleged that LVNV had not registered with the State as a collection agency before it filed the suit against him. According to Trice, LVNV obtained a license to act as a collection agency on August 28, 2008, some months after LVNV filed the lawsuit against Trice, but some months before the court entered a judgment in favor of LVNV. Trice did not include any allegations concerning how he discovered that LVNV had not registered, and he included no other allegations related to his diligence. He sought only a finding that LVNV's failure to register rendered void the judgment entered against him on January 15, 2009.

¶ 5 LVNV invoked section 2–615 of the Code of Civil Procedure (735 ILCS 5/2–615 (West 2008)) as grounds for its motion to dismiss Trice's motion to vacate the judgment. LVNV argued that the trial court had jurisdiction over the parties and the subject matter, so the judgment was not void.

¶ 6 The trial court denied Trice's motion to vacate the judgment without hearing evidence because Trice should have notified the court before trial that LVNV had not registered as a collection agency. Trice now appeals.

¶ 7 ANALYSIS

¶ 8 Our supreme court clarified the law pertaining to section 2–1401 motions in People v. Vincent, 226 Ill.2d 1, 312 Ill.Dec. 617, 871 N.E.2d 17 (2007). The party seeking relief from a judgment must plead and prove (1) that he had “a defense or claim that would have precluded entry of the judgment in the original action” and (2) that he acted with “diligence in both discovering the defense or claim and presenting the petition.” Vincent, 226 Ill.2d at 7–8, 312 Ill.Dec. 617, 871 N.E.2d 17. The party opposing the 2–1401 petition may move to dismiss it as insufficient at law, or the party may dispute the factual assertions of the petition. Vincent, 226 Ill.2d at 8–9, 312 Ill.Dec. 617, 871 N.E.2d 17. Where the parties dispute a material issue of fact, the trial court should hold an evidentiary hearing before ruling on the petition. Vincent, 226 Ill.2d at 9, 312 Ill.Dec. 617, 871 N.E.2d 17. “[W]hen a court enters either a judgment on the pleadings or a dismissal in a section 2–1401 proceeding, that order will be reviewed, on appeal, de novo.” Vincent, 226 Ill.2d at 18, 312 Ill.Dec. 617, 871 N.E.2d 17.

¶ 9 Here, LVNV moved to dismiss the 2–1401 motion as legally insufficient. See 735 ILCS 5/2–615 (West 2008); [352 Ill.Dec. 9]

[952 N.E.2d 1235]

Oliveira v. Amoco Oil Co., 201 Ill.2d 134, 147, 267 Ill.Dec. 14, 776 N.E.2d 151 (2002). For purposes of our review of the judgment, we must accept as true all well-pleaded facts in Trice's motion to vacate the judgment. Oliveira, 201 Ill.2d at 147, 267 Ill.Dec. 14, 776 N.E.2d 151. We will affirm the dismissal “only where no set of facts can be proved under pleadings which set forth a cause of action entitling the plaintiff to relief.” Bank of Northern Illinois v. Nugent, 223 Ill.App.3d 1, 9, 165 Ill.Dec. 514, 584 N.E.2d 948 (1991). However, the petition must set forth sufficient facts to show entitlement to the relief sought. Barham v. Knickrehm, 277 Ill.App.3d 1034, 1037, 214 Ill.Dec. 721, 661 N.E.2d 1166 (1996).

¶ 10 Trice has adequately alleged that before it filed the lawsuit, LVNV had not registered as a collection agency, as required by the Illinois Collection Agency Act (Act) (225 ILCS 425/14, 14b (West 2008)). But Trice did not raise this issue before the trial court entered a final judgment against him on LVNV's complaint. Trice raises the issue only in a 2–1401 petition for relief from the judgment. Finally, Trice claims that LVNV's failure to register makes the judgment in its favor void, and not merely voidable.

¶ 11 When the trial court enters a void judgment, a party aggrieved by the judgment may attack it in a 2–1401 motion without showing diligence. “[T]he allegation that the judgment or order is void substitutes for and negates the need...